PVR INOX Proposes to Scrap VPF for All Films, A Year After Jolly LLB 3 Controversy

The Indian film exhibition sector is currently witnessing a transformative regulatory turning point as PVR INOX Limited has formally proposed the total elimination of the Virtual Print Fee (VPF). This initiative has been submitted to the Competition Commission of India (CCI) under Case No. 42 of 2023, which involves The Film and Television Producers’ Guild of India Limited.

The conflict gained significant momentum in September 2025, when the CCI initiated an investigation into alleged violations of Section 4 of the Competition Act, concerning the abuse of a dominant market position. In response to these legal pressures, PVR INOX filed a commitment application under Section 48B of the Act to address concerns regarding the transparency and equity of their fee structures.

The CCI is currently inviting public comments, objections, and suggestions regarding this proposal until October 1, 2026. Historically, VPF has been a contentious levy-averaging approximately Rs. 20,000 per screen-originally implemented to offset the capital expenditure of digital projection technology.

While exhibitors have long maintained that the fee is essential to maintaining high-quality cinematic experiences, producers have consistently argued that the charge was intended as a temporary measure and should not be imposed indefinitely, creating a protracted economic struggle between content creators and theater operators.

Regulatory Scrutiny Stemmed Nonconfidential Summary

The regulatory scrutiny stemmed from a non-confidential summary Furthermore, the commission noted evidence that certain major Hollywood and Hindi film studios were being granted exemptions from the fee, while smaller and medium-sized producers were burdened com/entertainment/movie" title="SeenTick Movie News">theatrical releases. The industry's friction reached a boiling point in 2025 during the release of Jolly LLB 3, when PVR INOX suspended bookings for the film twice due to a payment dispute with Viacom18, ultimately forcing the makers to pay the fee under protest.

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This incident mirrored the complex “sunset clause” agreements the exhibitor had previously negotiated with studios like Yash Raj Films (YRF) and Viacom, which mandated that VPF payments could only be phased out if these studios ceased paying such fees to all other exhibition partners. Had these clauses been fully realized, major 2025 releases such as Saiyaara and War 2 might have transitioned to a VPF-free model.

To move past this cycle of volatility, PVR INOX’s new proposal dictates that all upfront VPF payments-regardless of the film’s language-will cease within 120 days of the CCI accepting the commitment. Instead, the company has introduced two flexible alternatives: a weekly Exhibition Service Charge (ESC) based on usage, or a shift in revenue sharing percentages.

Under the proposed post-VPF framework, the first option allows producers to pay a weekly per-show Exhibition Service Charge of Rs. 450 for standard screens and Rs. 600 for premium formats, including IMAX, 4DX, Screen X, and Luxe.

These rates are designed to decrease to Rs. 250 and Rs. 350, respectively, once a film completes 60 shows, ensuring that long-running features benefit from a reduced financial burden.

Alternatively, producers may select a Revised Revenue Share (RRS), which reduces their existing share of net box-office collections PVR INOX has emphasized that neither model involves the traditional, restrictive upfront payment system. These proposed rates are subject to a triennial review based on objective cost data and ongoing consultation with stakeholders, ensuring a more sustainable long-term economic model.

The industry is already seeing signs of this shift; for instance, during the release of the Huma Qureshi-starrer Single Salma (2025), PVR INOX opted to waive the VPF amidst the ongoing CCI investigation. Similarly, the success of the Gujarati blockbuster Laalo - Krishna Sada Sahaayate demonstrated that distributors, when holding strong leverage, could successfully negotiate the waiver of these fees, though some trade reports suggest such instances remained exceptions rather than the norm.

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If the CCI formally accepts PVR INOX’s commitments, it will mark a permanent alteration to the financial landscape of Indian cinema, effectively resolving a decade-long dispute that dates back to the 2019 legal challenge initiated